• SEC Chair Gary Gensler defends recent crackdown on crypto exchanges, stating they were warned.
• Gensler criticized them for failing to register and comply with securities laws.
• Gensler cited leaked chat logs from a former Binance Compliance Lead as evidence of knowing the rules.
SEC Chairman Defends Crypto Crackdown
SEC Chairman Gary Gensler recently defended the agency’s lawsuits against Binance and Coinbase, citing their failure to register and comply with securities laws. In his speech at the Piper Sandler Global Exchange & Fintech Conference on June 8th, 2023, Gensler dismissed claims from exchanges that stated they lacked “fair notice” regarding their conduct could be illegal. He also cited leaked chat logs from a former Binance Compliance Lead as evidence of knowing the rules.
Gensler Cites Lack of Compliance
Gensler expressed that crypto compliance is possible but requires work, suggesting some exchanges sought meetings with the agency but did not make necessary changes to comply. He went on to emphasize the need for security issuers to register offers and sales of their investment contracts in order to protect investors from potential harm.
Crypto Assets Are Securities
The SEC Chair made it clear in his statement that most crypto assets are considered securities due to their value being dependent upon external factors such as efforts of others or the development of an enterprise/marketplace/platform. This means it is essential for these entities to register with the SEC in order to adhere to existing securities laws and protect investors from potential fraud or manipulation schemes.
Implications for Intermediaries
The stance taken by Gensler has significant implications for crypto intermediaries and the broader market alike, potentially reshaping how cryptocurrency regulation is handled under his leadership going forward. His statements indicate that there will be increased oversight into digital asset activities so intermediaries must take steps towards ensuring compliance as soon as possible if they wish to avoid similar repercussions suffered by Coinbase and Binance earlier this year.
In conclusion, Chairman Gary Gensler has made it abundantly clear that he intends to enforce existing securities law when it comes to cryptocurrencies– emphasizing there will be consequences for those who fail or refuse to comply with these regulations going forward. It remains uncertain what other measures may come into effect under new leadership at the SEC but one thing is certain – crypto entities must pay close attention if they want remain compliant with current standards set forth by authorities around the globe.